Knife poised over beef exports

The golden run for beef exporters could be drawing to an end after Taiwan's decision to lift its ban on US beef.

The Taiwanese ban is expected to go on April 16.

If Japan and Korea follow suit, the effect could be disastrous for beef exporters already struggling to cope with the high kiwi dollar.

Strong commodity prices for beef and lamb have so far buffered exporters from the effects of the rising currency.

But global beef markets have been distorted by the ban on US product.

Beef exports to Taiwan were worth $174 million last year, up 44 per cent on the year to September 2003.

A single case of mad cow disease (BSE) in December 2003 prompted the Asian ban on US beef and they turned to Australia and New Zealand to fill the gap.

New Zealand beef exports to Japan in the year to September 2004 were up 96 per cent by volume and 124 per cent by value. The market is now worth $247 million.

PPCS chief operating officer Keith Cooper said yesterday the Taiwanese decision signalled the beginning of a serious issue for local exporters.

"When no one had opened up their markets, there was no pending issue. Now that one has, it starts the ball rolling."

Cooper said the high dollar was already threatening the profitability of the meat industry.

It was not good enough for politicians to point to high commodity prices providing a buffer.

Beef had remained strong because of the artificial trading conditions caused by the bans, a situation that was always going to correct.

Japan - the most significant market - has some of the toughest food safety standards in the world and is still bogged down in negotiations with the US over the issue.

The Korean Government made it clear last week it would lift its ban only once scientific investigations were completed.

The Taiwanese decision also comes with strict conditions.

The Taipei Times reported that only beef from cows that were born, fed and butchered in the US and under 30 months old would be allowed entry.

Other conditions included the type of meat permitted and that all slaughter and packing plants be registered. Last week, Meat & Wool New Zealand economist Rob Davison said the strict conditions attached to any lifting of the bans meant US beef was likely to return to the North Asian market in a relatively orderly fashion.

This season's beef kill is already about 8 per cent down on last year. But Davison said that was expected after the industry processed record numbers last year.

Beefed up

* A case of BSE (mad cow disease) in December 2003 prompted a US beef ban in Taiwan, Japan and Korea.


* New Zealand and Australian exporters have cashed in on the gap in the market.


* Beef exports to Taiwan were worth $174 million last year, up 44 per cent on the year to September 2003.


* Exports to Japan were worth $247 million - more than double the value of the year before.